Lending plummets
The Mortgage Brokers Association just released their multifamily lending report, revealing that the dollar amount decreased between 2007 to 2008, plummeting to $88 billion in volume.
In retrospect, this makes perfect sense as the wheels grinded to a halt in lending across the board with the credit crunch and options for loan packages have had to adjust. According to MBA’s Vice President of Commercial Real Estate Research, “26 percent of lenders who made multifamily loans in 2008 made just one, and two-thirds made five or fewer.”
Regarding how 2009 will shape up, Nathan Hughes, Commercial Realtor and Business Broker with Bandazian & Holden said, “I don’t think that we can possibly achieve a much lower level of lending in 2009 than we saw in 2008 – some bankers have told me that they’ve been instructed to freeze any loans except for owner-occupied. Lower lending means less movement (other than the change of ownership from individual owners to banks by foreclosure), and that necessarily means that my involvement as a sales agent in multi-family transactions is a bit more limited and that business diversification is even more necessary now.”
